Shell companies under IT scanner; involvement in Benami transactions suspected

Banks started scanning all the account details of directors who were disqualified by the Ministry of Corporate Affairs as part of alleged shell companies.

Representational Image: Photo: Pixabay

Key highlights:

Properties above Rs 30 lakh under investigation of IT-Department

About 600 properties having value up to Rs 1,800 crore under scanner

Action against shell companies involvement in Benami properties soon

The Income Tax Department has decided to match tax history of people having properties above Rs 30 lakh under the provisions of anti-Benami Act.

Furthermore, the department will also be investigating those suspected shell companies and directors who have been identified by Ministry of Corporate Affairs as a part of their drive to check black money generation and their involvement in Benami Act.

Sushil Chandra, Chairman of Central Board of Direct Taxes (CBDT), said, "We will destroy all instruments that are used to convert black money into white. This also includes shell companies. Also, the department is checking the income tax profiles of all properties which have a registry value of over Rs 30 lakh," reported in PTI.

According to Chandra, the department under Operation Clean money has decided to check details of how many deposited in their bank accounts during demonetisation. They have been asked for online responses and received about 12 lakh responses, he informed.

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The department then guided to these people for filing their returns and asked them to provide informations like how much was deposited between November 08 - December 2016 into bank accounts. From which, it was noted that online filing of returns increased by 20% and individual filing by 23.5% during that period.

"So, the next step would be that the persons who have not filed their returns, we are going to issue them notices under section 142 (1) of the I-T Act (inquiry before assessment)," Chandra told reporters on the sidelines of an event at the India International Trade Fair (IITF) here.

Under Benami properties Act, the IT team has carried out investigation in over 600 properties having assets value up to Rs 1,800 crore.

Benami Transactions (Prohibition) Act prohibits certain types of financial transactions. The act defines a 'benami' transaction as any transaction in which property is transferred to one person for a consideration paid by another person.

Also, Chandra added that properties which are benami either through shell companies or from any other mediums - investigation has been carried.

For this, the department has opened 24 units (of the I-T to implement the anti-Benami Act) all over the country, Chandra said, adding that they are getting information from different sources as well.

On November 05, the government has struck off a total of 2,24,000 companies resulting in disqualification of about 3,09,000 directors.

Among these companies, nearly Rs 17,000 crore was moved in and out of bank accounts since demonetisation. There were about 58,000 bank accounts which belonged to 35,000 deregistered companies.

According to data provided by Ministry of Corporate Affairs, in one case, a company had negative opening balance on November 08, 2016 - deposited and withdrew about Rs 2,484 crore post the noteban drive. While one company was found having as many as 2,134 accounts.

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